Walgreens to Close About 200 U.S. Stores in $1B Cost Reduction Plan

Walgreens plans to close about 200 U.S. stores as the nation's largest drugstore chain expands on a $1 billion cost-reduction plan it announced last August.
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Walgreens (WBA) plans to close about 200 U.S. stores as the nation's largest drugstore chain expands on a $1 billion cost-reduction plan it announced last August. The Deerfield, Illinois, company said Thursday that it also will reorganize its corporate operations and streamline its information technology and other functions. It expects the moves to add $500 million to its estimate for cost savings from its three-year plan. The store closings amount to about 2 percent of the 8,232 drugstores it runs in the United States, Puerto Rico and the U.S. Virgin Islands. Walgreen said its moves will lead to a ‘faster and more agile company.’ It expects to book pre-tax charges for the restructuring of between $1.6 billion and $1.8 billion as it implements the program. Late last year, Walgreens completed a nearly $16 billion deal to purchase the remaining stake of European health and beauty retailer Alliance Boots that it didn't already own. The company was renamed Walgreens Boots Alliance Inc. Walgreens also said Thursday that it earned $2.04 billion, or $1.93 per share, in its fiscal second quarter. Earnings, adjusted for one-time gains and costs, were $1.18 per share. That topped Wall Street expectations. The average estimate of 14 analysts surveyed by Zacks Investment Research was for earnings of 94 cents per share. But the drugstore chain's revenue of $26.57 billion fell short of analyst forecasts for $27.73 billion. Walgreen also announced a forecast for full-year earnings in the range of $3.45 to $3.65 per share. Analysts expect, on average, earnings of $3.62 per share, according to the data firm FactSet.